Consumer Education Guest Post: How Seductive Marketing Techniques Influence Financial Risk Taking

The following is a guest post from Ryan T. Howell, Ph.D. Assistant Professor, Psychology Department San Francisco State University and Co-founder of BeyondThePurchase.org. You can follow him on Twitter @SpendingWell.

Think about the last time you watched a football game. Now think about the all the commercials you had to watch. Have you ever wondered why certain brands seem to just add attractive models, for what appears no good reason? Well, there is a reason -- highly seductive and positive emotions make you take more financial risks. Why is that? I am glad you asked.

When you are exposed to seductive marketing techniques, a region region deep within your brain called the nucleus accumbens becomes activated. This is the part our brain that is "turned on" when we experiencing positive emotions such as excitement. So, how do we know that this region of the brain will make you take more financial risks? A study by Knutson and colleagues provides evidence for the link between nucleus accumbens activation and financial risk taking.

In their study, participants were randomly presented with pictures of couples in seductive positions (highly seductive and positive), snakes and spiders (highly seductive and negative) or household appliances (neutral picture). They were then instructed make an investment--their two choices were to invest $1.00 or $0.10 (a less risky investment). The researchers also used functional magnetic resonance imaging (fMRI) techniques to “see” what parts of the brain were activated (what brain regions were turned on) during financial decision making. In this way they can correlated brain activation with financial choices.

The researchers found that when people were shown pictures of couples in arousing positions, they were more likely to risk $1.00 compared to when they were shown pictures of a spider and a snake or household appliances. Most importantly, they found that the nucleus accumbens, the part of the brain associated with experiencing positive emotional states, were more activated when making riskier decisions.

Thus, by activating the nucleus accumbens region of the brain through arousing stimuli, people made risky financial investments.

So, this is all well and good, but why do these results matter? Well, this type of subtle “priming” happens all the time. In fact, this basic principle is widely used in casinos. Casino owners want people to make riskier decisions when gambling, so casinos are designed to maximize positive emotions like excitement. Casino floors are full of colorful lights, attractive servers, and appetizing food and drinks all working together to increase your nucleus accumbens activation. So, the next time you’re in Las Vegas, pay attention to parts of the environment designed to activate your nucleus accumbens. While there is nothing wrong with going to Las Vegas, it might not be a bad idea to pause and consider what is influencing your spending habits. After all, casino owners know what will make you spend more money—you should too.

How can you find out what else influences your spending habits? At BeyondThePurchase.Org we are researching the connection between people’s spending habits, happiness, and values. To find out more about subtle primes that influence your spending, we encourage you to first Login or Register with Beyond The Purchase and then take the Implicit Buying Motives Study. You might then try the Consumer Susceptibility to Interpersonal Influence Scale, which measures the extent to which the values of your family and friends influence your own behavior. Along the way, we think you’ll find out a bit more about why you buy and what makes you happy. The results might be surprising.

This post is based on the following research paper:

Brian Kuntson, G. Ellition Wimmer, Camelia M. Kuhnen and Piotr Winkielman (2008). Nucleus accumbens activation mediates the influence of reward cues on financial risk taking. NeuroReport, 19, 509-513.